India and Saudi Arabia have signed a memorandum of understanding on cooperation and investment in renewable energy, energy efficiency, hydrogen, electricity, and grid interconnection at the first meeting of India-Saudi Arabia Strategic Partnership Council.
The MoU between the Government of the Republic of India and the Government of the Kingdom of Saudi Arabia was signed in New Delhi on 10th September, 2023, by Union Minister for New & Renewable Energy and Power, Government of India, Shri R. K. Singh for the Indian side and Minister of Energy for the Kingdom of Saudi Arabia, His Royal Highness Abdulaziz bin Salman Al-Saud for the Saudi side.
India-Saudi Arabia Strategic Partnership Council
The India-Saudi Arabia Strategic Partnership Council, established in 2019, serves as a platform between the two countries to increase ties.
- The Strategic Partnership Council (SPC) has two sub-committees – I) Committee on Political, Security, Social and Cultural Cooperation; and II) Committee on Economy and Investments.
- The two countries agreed to set up a joint working group (JWG) to streamline and channelise the $100 billion in investments promised by the Saudi side during the crown prince’s last visit to India in February 2019.
- Of this, $50 billion was earmarked for the West Coast refinery, a mega plant to be set up by Saudi Aramco, Abu Dhabi National Oil Company (ADNOC) and Indian firms.
According to the MoU, India and Saudi Arabia will cooperate in the following areas:
Renewable Energy, Energy Efficiency, Hydrogen, Electricity and Grid Interconnection between the two countries, Petroleum, Natural Gas, Strategic Petroleum Reserves and Energy Security.
- Encouraging bilateral investment in the field of Renewable Energy, Electricity, Hydrogen and Storage; and Oil & Gas.
- Circular Economy and its technologies to reduce the effects of climate change, such as: carbon capture, utilization and storage.
- Promoting digital transformation, innovation and cyber-security and artificial intelligence in the field of Energy.
- Working on developing qualitative partnerships between the two countries to localize materials, products and services related to all sectors of energy, supply chains and its technologies.
- Strengthening the cooperation with companies specialized in the field of energy.
- Any other fields related to the energy field that the two countries agree upon.
The MoU will develop a stronger partnership between India and Saudi Arabia in the field of energy. The MoU will support India’s efforts for energy transition and transformation of the global energy system towards combating climate change.
India’s Quest for energy security
India has been exploring linking its power grid with those of Saudi Arabia and the UAE through subsea cables from its west coast and with the power grid of Singapore from the east coast.
- By sharing power resources across regions, countries can reduce the need for costly renewable energy storage solutions and improve the reliability of their power grids.
- India’s pursuit of grid interconnectivity could also prove critical to its long-term economic and energy security goals. India is pursuing the One Sun One World One Grid (OSOWOG) plan, which aims to connect countries through a global power grid.
- A task force set up by the power ministry has examined the feasibility of interconnecting the regional grids of Southeast Asia, South Asia, the Middle East, Africa, and Europe for sharing renewable energy.
- India has been actively exploring strategies to diversify its energy resources because of the significant turbulence in the global energy markets following Russia’s incursion into Ukraine.
- India has targeted to achieve 5 million tonnes (MT) of green hydrogen capacity annually, along with an additional 125 GW of renewable energy capacity by 2030 under the National Green Hydrogen Mission announced in August 2021 as part of the national effort to diversify its energy basket.
- The country also announced the formation of the Global Biofuels Alliance for enhanced recycling of agriculture and forest residue, Municipal Solid Waste (MSW), cow dung, etc., for conversion to biofuels such as ethanol and ammonia.